Which of the following statements accurately explains why profits for firms in a perfectly competitive industry tend to vanish in the long run? Group of answer choices The demand for products falls over time, so firms are unable to generate revenue. Firms that experience losses try to increase supply to cover their costs, leading to zero profits. Prices drop when other perfectly competitive firms see an opportunity to earn profits and enter the market.
Which of the following statements accurately explains why profits for firms in a perfectly competitive industry tend to vanish in the long run? Group of answer choices The demand for products falls over time, so firms are unable to generate revenue. Firms that experience losses try to increase supply to cover their costs, leading to zero profits. Prices drop when other perfectly competitive firms see an opportunity to earn profits and enter the market.
Chapter12: Firms In Perfectly Competitive Markets
Section: Chapter Questions
Problem 2P
Related questions
Question
Which of the following statements accurately explains why profits for firms in a perfectly competitive industry tend to vanish in the long run?
Group of answer choices
Prices drop when other perfectly competitive firms see an opportunity to earn profits and enter the market.
The demand for products falls over time, so firms are unable to generate revenue.
Firms that experience losses try to increase supply to cover their costs, leading to zero profits.
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